Online Retailers Are Using Empty Mall Spaces to Test Products

The retail apocalypse may have a silver lining after all: Malls are now being repurposed as startup incubation hubs.

Mall operators are teaming up with startup programs to offer startups co-working spaces, networking and mentorship possibilities. In November, the Pennsylvania Real Estate Trust and incubator 1776 will open a retail incubator inside the Cherry Hill Mall, and for the past three years, Westfield has been using space in the Westfield San Francisco Centre shopping mall to connect startups with member retailers.

With big-box retailers closing stores, operators are exploring new uses for mall spaces to cope with a six-year high in mall vacancy rates in the U.S. — reportedly 8.6 percent in the second quarter of 2018. Beyond giving new digital companies an entry point to the physical retail world, companies can test products with mall customers.